Higher Education Loan Tax Reduction Welcome

The announcement by the Minister for Education, that the student loan tax applied to loans for studying
with most independent providers is to be reduced, has been welcomed by the Independent Tertiary
Education Council Australia (ITECA), the peak body representing independent providers in the higher
education, vocational educatio n, training and skills sectors.

“One of the perverse aspects to Australia’s higher education system, is that we tax students when
borrowing to stu dy with most independent providers. A student loan tax of 25% is levied on a student’s
FEE -HELP loan. So, a $40,000 debt to the government becomes $50,000 when the tax is added. It’s just
wrong,” said Mr Troy Williams, ITECA Chief Executive.

The Minister for Education has acknowledged the calls of ITECA and other stakeholders and announced
that the 25% student loan tax for FEE -HELP loans will be reduced to the level of 20%.

The lower student loan tax rate is the same as th e 20% rate paid by students in the vocational education
and training (VET) sector when accessing a VET Student Loan to support their Diploma o r Advanced
Diploma studies.

“ITECA is a strong advocate for the complete elimination of the student loan tax on both FEE -HELP and
VET Student Loans, because it’s simply wrong to tax people investing to achieve their career and life
goals. We were pleased to be a party to negotiations that saw this reduction in the FEE -HELP student
loan tax as a first step on the journey to completely eliminating the tax,” Mr Wil liams said.

ITECA is talking a lead role to have the student loan tax removed and is spearheading the ‘End The
Student Loan Tax ‘ campaign that’s enjoying growing momentum. It’s part of a n ITECA member -driven
advocacy effort to better support students. Ot her stakeholders are also undertaking their own advocacy
on this issue.

“With the great support of ITECA members, we successfully lobbied to have both the student loan tax es
suspended for six months as part of the Covid -19 response. That this advocacy has seen the Australian
Government commit to a further reduction of the FEE -HELP student loan tax is a great outcome for
students studying with independent higher education providers,” Mr Williams said.

Independent providers support around 10% of the 1.5 mill ion students in higher education.

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